Capital transfers (D.9) are different from current transfers by the fact that they involve the acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction. Whether made in cash or in kind, they should result in a commensurate change in the financial, or non-financial, assets shown in the balance sheets of one or both parties to the transaction. (EKT 1995 4.145-4.167)
Capital transfers cover
a) Capital taxes (D.91), which consist of taxes levied at irregular and very infrequent intervals on the values of the assets or net worth owned by institutional units or on the values of assets transferred between institutional units as a result of legacies, gifts inter vivos or other transfers, e.g. inheritance taxes, death duties and taxes on gifts inter vivos. (EKT 1995 4.148-4.151)
b) investment grants (D.92), which consist of capital transfers in cash or in kind made by governments or by the rest of the world to other resident or non-resident institutional units to finance all or part of the costs of their acquiring fixed assets. Investment grants in kind consist of transfers of transport equipment, machinery and other equipment by governments to other resident or non-resident units and also the direct provision of buildings or other structures for resident or non-resident units. (EKT 1995 4.152-4.163)
c) other capital transfers (D.99), which include transfers other than investment grants and capital taxes which do not themselves redistribute income but redistribute saving or wealth among the different sectors or sub-sectors of the economy or the rest of the world. (EKT 1995 4.145-4.167)
Compensation of employees (D.1) is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the accounting period.
Compensation of employees is broken down into:
a) wages and salaries (D.11): wages and salaries in cash; wages and salaries in kind;
b) employers’ social contributions (D.12): employers’ actual social contributions (D.121); employers’ imputed social contributions (D.122).
(ESA 1995 4.02)
ESA95 manual on government deficit and debt, the updated manual on the European system of national and regional accounts.
The term "general government" in ESA 1995 denotes the public sector and includes central government, (federal) constituent states, local government, and social security funds. The Finnish general government sector includes the State, municipalities and intermunicipal authorities, the regional government of the Åland Islands, and social security funds. Unincorporated market producer enterprises owned by the state or municipalities are not included. The state sector includes the state budget economy and extra-budgetary funds.
Social security funds include all institutional units that administer the statutory social security system, such as the Social Insurance Institution, the Unemployment Insurance Fund, funds that manage unemployment and disability schemes, as well as companies, pension institutions, pension funds and public institutions (e.g. the Local Government Pensions Institution) that manage statutory employment pension insurance schemes. Finnish employment pension institutions are classified into the general government sector according to a decision given by the European Commission in January of 1997.
Not included in employment pension institutions are funds and foundations that manage voluntary pension. Prior to the statistical year 2000 these so-called "A" pension funds and foundations and the "A" parts of "AB" pension funds and foundations could not be separately itemised from data gathered from employment pension institutions.
The components, expenditure types, of the concept 'total expenditure' used in the statistics are congruent with the types of expenditure used in the national accounts reporting table '200 Main aggregates of general government'.
According to the instructions for the reporting table 200 the expenditure types D4 Property expenditure, D7 Other current transfers and D9 Capital transfers are to be consolidated within each sub-sector and when forming the General government (S13) sector. In other words, the transactions between sub-sectors in question are to be eliminated in such a case. When describing sub-sectors, transactions between them are presented unconsolidated.
Total expenditure by type of expenditure
The components, i.e. expenditure types, of the total expenditure described in reporting table 200, which are also used when describing expenditure by function, are transactions of national accounts (EKT 1995 1.33. and 1.36.) and are as follows:
Gross fixed capital formation (P.51)
Net acquisition of non-financial non-produced assets (K.2)
Compensation of employees (D.1)
Intermediate consumption (P.2)
Property expenditure (D.4)
Social benefits other than social transfers in kind (D.62)
Social benefits in kind (D.63)
Other current transfers (D.7)
Capital transfers (D.9)
Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year. (ESA 1995 3.102.)
Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services may be either transformed or used up by the production process. (ESA 1995 3.69.)
Products used for intermediate consumption should be recorded and valued at the time they enter the process of production. They are to be valued at the purchasers’ prices for similar goods or services at that time. (ESA 1995 3.72.)
Land and other tangible non-produced assets consist of assets which can be used in the production of goods and services. (EKT 1995 6.06-6.11)
Other current transfers (D.7) include:
Net non-life insurance premiums (D.71)
These are premiums payable under policies taken out by institutional units. They comprise both the actual premiums payable by policy holders to obtain insurance cover during the accounting period (premiums earned) and the premium supplements payable out of the property income attributed to insurance policy holders, after deducting the service charges of insurance enterprises arranging the insurance. (EKT 1995 4.109)
Non-life insurance claims (D.72)
These represent the claims due under contracts in respect of non-life insurance, i.e. amounts which insurance enterprises are obliged to pay in settlement of injuries or damage suffered by persons or goods (including fixed capital goods).
Current transfers within general government (D.73)
Current transfers within general government include transfers between the different sub-sectors of general government (central government, local government, social security funds) with the exception of subsidies, investment grants and other capital transfers. Current transfers within general government do not include transactions on behalf of another unit; these are recorded only once in the accounts, in the resources of the beneficiary unit on whose behalf the transaction is made. This situation arises particularly when a government agency (e.g. a central government department) collects taxes which are automatically transferred, in total or in part, to another government agency (e.g. a local authority). In this case, the tax receipts destined for the other government agency are shown as if they were collected directly by that agency and not as a current transfer within general government. On the other hand, transfers of tax receipts which form part of a block transfer from central government to another government agency are included in current transfers within general government. (EKT 1995 4.117-4.120)
Current international cooperation (D.74)
Current international cooperation includes all transfers in cash or in kind between general government and governments or international organisations in the rest of the world, except investment grants and other capital transfers. The following are included:
a) the non-tax contributions of the government to the institutions of the European Union, except the "GNP-based fourth own resource".
b) the contributions of the government to international organisations (excluding taxes payable by member governments to supranational organisations)
c) any current transfers which general government may receive from the institutions or organisations referred to under (a) and (b)
d) current transfers between governments, either in cash (e.g. payments intended to finance the budget deficits of foreign countries or overseas territories) or in kind (e.g. counterpart of gifts of food and military equipment, emergency aid after natural disasters in the form of food, clothing, medicines, etc.)
e) wages and salaries paid by a government, an institution of the European Union or an international organisation, to advisers or technical assistance experts made available to developing countries.
(EKT 1995 4.121-4.124)
Other current transfers to non-financial corporations and housing corporations (D.7911) and financial institutions (D.7912).
Other current transfers to households (D.7914) and to non-profit institutions serving households (D.7915).
Current transfers to non-profit institutions serving households (NPISHs) include all voluntary contributions (other than legacies), membership subscriptions and financial assistance which NPISHs receive from households and, to a lesser extent, from other units. The following are included:
a) regular subscriptions paid by households to trade unions and political, sporting, cultural, religious and similar organisations classified in the sector NPISHs
b) voluntary contributions (other than legacies) from households, corporate enterprises and the rest of the world to NPISHs, including transfers in kind in the form of gifts of food, clothing, blankets, medicines, etc. to charities for distribution to resident or non-resident households
c) assistance and grants from general government, other than transfers made for the specific purpose of financing capital expenditure, which are shown under investment grants. Excluded are payments of membership dues or subscriptions to market NPIs serving businesses, such as chambers of commerce or trade associations, which are treated as payments for services rendered. (EKT 1995 4.125-4.128)
Property expenditure (D.4) are expenditure paid to the owner of a financial asset or a tangible non-produced asset in return for receiving funds or being provided the tangible non-produced asset.
Property expenditure is classified in the system of accounts in the following way:
a) paid interests (D.41):
b) distributed income of corporations (as expenditure) (D.42)
(1) paid dividends (D.421)
(2) withdrawals from income of quasi-corporations (as expenditure) (D.422)
c) reinvested earnings on direct foreign investment (as expenditure) (D.43)
d) property income attributed to insurance policy holders (as expenditure) (D.44)
a) paid rents (D.45).
(EKT 1995 4.41)
Social benefits other than social transfers in kind (D.62) include:
a) Social security benefits in cash are payable to households by social security funds and are provided under social security schemes. E.g. pensions, unemployment benefits.
b) Social assistance benefits in cash are payable to households by government units to meet the same needs as social insurance benefits but are not made under a social insurance scheme incorporating social contributions and social insurance benefits. E.g. living allowances paid by municipalities, child maintenance allowances.
Social transfers in kind consist of individual goods and services provided as transfers in kind to individual households by government units and non-profit institutions serving households (NPISHs), whether purchased on the market or produced as non-market output by government units or NPISHs.
Subsidies (D.3) are current unrequited payments which general government or the institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production. Other non-market producers can receive other subsidies on production only if those payments depend on general regulations applicable to market and non-market producers as well.
Subsidies granted by the Institutions of the European Union cover only current transfers made directly by them to resident producer units.
Subsidies are classified into:
a) subsidies on products (D.31)
(1) import subsidies (D.311)
(2) other subsidies on products (D.319)
b) other subsidies on production (D.39).
(ESA 1995 4.30.-4.32.)